JERUSALEM: Israeli police on Tuesday recommended indicting Prime Minister Benjamin Netanyahu for bribery, opening the way for what could be the biggest challenge yet to the right-wing leader's political survival.

Against the backdrop of Israeli flags in a televised speech at his residence, a sombre Mr Netanyahu called the allegations baseless and vowed to complete his fourth term in office.

It will be up to Israel's Attorney-General to decide whether to file charges, a process that could take weeks if not months.

The recommendations, which police made public on Tuesday night, were at the more serious end of the range of charges that had been expected to be levelled against Mr Netanyahu in two criminal investigations that have gone on for more than a year.

One of the cases, known as Case 1000, alleged the"committing of crimes of bribery, fraud and breach of trust by the Prime Minister, Mr Benjamin Netanyahu".

In a detailed statement, police named Mr Arnon Milchan, a Hollywood producer and Israeli citizen, and Australian businessman James Packer, saying that for nearly a decade, from 2007 to 2016, they gave gifts that included champagne, cigars and jewellery to Mr Netanyahu and his family.

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In all, the merchandise was worth more than 1 million shekels (S$373,000), the statement said. Any legal proceedings would likely focus on whether political favours were sought or granted.

Mr Netanyahu's lawyers said the presents were simply tokens of friendship.

The second, Case 2000, also alleged "bribery, fraud and breach of trust by the Prime Minister" and by the publisher of the biggest-selling Israeli newspaper Yedioth Ahronoth, Mr Arnon Mozes. The two men, police said, discussed ways of slowing the growth of rival daily newspaper Israel Hayom "through legislation and other means".

QUESTIONED

Mr Netanyahu, who has denied wrongdoing, has been questioned several times by police since the start of last year.

In his television appearance, minutes after police made their recommendations public, Mr Netanyahu, 68, recounted his military service as a commando and said he had never sought personal gain from politics.

"I will continue to lead Israel responsibly and faithfully for as long as you, the citizens of Israel, choose me to lead you," he said. "I am certain, I am certain, that the truth will be revealed, and I am certain that at the next elections, which will be held on schedule, I will earn your trust again, with God's help."

Israel is scheduled to go to the polls in late 2019.

"Because I know the truth, I tell you ... things will end in nothing," Mr Netanyahu said.

Israel's Channel 10 television quoted a lawyer for Mr Milchan as saying that the occasional gift-giving was devoid of any business interests.

A spokesman for Mr Packer said: "There is no allegation of wrongdoing on Mr Packer's behalf. The Israeli and Australian police have confirmed that he was interviewed as a witness, not a suspect."

In Washington, State Department spokesman Heather Nauert said: "We're certainly aware of it, but we consider it to be an internal Israeli matter." - REUTERS